Economic performance

  • The NSW economy has remained resilient since the 2023-24 Budget, supported by population growth and a tight labour market.
  • Although inflation is slowing, underlying inflation remains high, driven increasingly by services. Since the Budget, the Reserve Bank of Australia (RBA) has raised the cash rate, noting its increasing intolerance to upside inflation risks.
  • The economic growth outlook has been revised up modestly for 2023-24, reflecting the resilience of the economy to date and stronger population growth.
  • Despite the upward revision, economic growth is forecast to be below trend in the near term as high inflation and interest rates continue to place pressure on household budgets.
  • The recent easing in the labour market is expected to continue, which should gradually see inflation return to around 3 per cent by late 2024-25. This will allow economic growth to return to long-run levels in the latter part of the forecast period.
  • Although the possibility of an imminent global downturn has faded, risks to the economic outlook remain elevated. Most prominent is the prospect of continued strength in population growth, risks around the persistence of inflation and the lagged effect of the sharp rises in interest rates, globally and domestically, on economic growth.

A more detailed economic outlook can be found in Chapter 2 of the 2023-24 Half Yearly Review. 

New South Wales economic performance and outlook (a)







  Outcome Forecast Forecast Forecast Forecast

Real state final demand


1½ (1¼) 

2 (2¼)

Real gross state product


1½ (1¼)


2½ (2¼)



1½ (1¾)

½ (¼)


Unemployment rate(b)


4½ (4¾)

Sydney consumer price index


4½ (4¾)

3¼ (3)

Wage price index



Nominal gross state product


3¾ (3½)

3 (3½ )

4 (4½)

5¼ (4¾)



1.7 (1.4)


1.3 (1.2)


(a) Forecasts are rounded to the nearest quarter point and are annual average per cent change, unless otherwise indicated. 2023-24 Budget forecasts in parenthesis where different.
(b) June quarter, per cent.
(c) Per cent change through the year to 30 June. 2022-23 figure remains a NSW Treasury forecast and is rounded to the nearest 0.1 percentage point. The assumption for net overseas migration takes into account partial data to the September quarter 2023 and thereafter is assumed to increase in line with assumptions in the 2023-24 Australian Government Budget.

Note: Commodity prices are assumed to follow Consensus Economics forecasts as of October 2023. The RBA’s interest rate path over the course of 2023 and 2024 is assumed to be broadly in line with the assumptions underpinning the RBA Statement on Monetary Policy (November 2023). The Australian dollar trade-weighted index is assumed to average 63.8 across the forecast period.


Source: Australian Bureau of Statistics (ABS) and NSW Treasury

Last updated: 14/12/2023